The World Bank has announced it will extend the life of the Global Food Crisis Response Program to June 2011, amid renewed concerns over food price volatility and its impact on poor countries.
The move will allow the financial institution to respond swiftly to calls for assistance by countries hit hardest by high food prices, by fast-tracking the processing and disbursement of up to $760 million to countries in need.
"We do expect high volatility in food prices to continue until at least 2015, so reactivating the Bank's food crisis fund means we're ready to help countries calling for assistance, said the World Bank Managing Director Ngozi Okonjo- Iweala.
Iweala said the crisis fund has proven to be an effective way to help countries with about 5.9 million farm households directly benefiting from timely assistance, adding that the social protection programs was estimated to have reached 5.6 million people.
Under the program, the countries in need are allowed to choose from a wide array of pre-tested options used to tackle food crisis.
In a statement, the World Bank Group President, Robert Zoellick, said there was growing concern among countries about continuing volatility and uncertainty in food markets, which needed to be urgently addressed.
"These concerns have been compounded by recent increases in grain prices. World food price volatility remains significant and in some countries, the volatility is adding to already higher local food prices due to other factors such as adverse weather. High volatility negatively impacts both consumers and farmers."
Launched in May 2008, the Global Food Crisis Response Programme (GFRP) was set up to help countries deal with the high food prices, by supporting safety net programs such as food for work, conditional cash transfers and school feeding programs for the most vulnerable groups.
The GFRP also provides support for food production by supplying seeds and fertilizer, improving irrigation for small-scale farmers, as well as for social safety net programs. It also provides budget support to offset tariff reductions for food and other unexpected costs.
To date, the total bank-funded operations under the GFRP amounts to $1.2 billion with assistance reaching 35 countries, mainly the most affected regions in Africa and Asia.
East Africa is one of the regions that has benefited from the programme, due to the intermittent vagaries of weather. The region is also expected to record a deficit in food production late this year and early next year, following the mild La Nina phenomenon currently being experienced in parts of Eastern Africa.
Global food prices increased noticeably in recent months amid bad weather in some major corn-producing regions. The decline of the U.S. dollar's exchange rate also pushed up the global market prices.